ANSWER ID:9127

From time to time, it may be necessary to enter a negative paycheque. For example, an employee may have been overpaid and has refunded the overpayment.

To create a negative paycheque, simply create a positive paycheque, then reverse it. Then delete the original (positive) paycheque, to leave just the negative one.

It is not possible to reverse a paycheque which has been entered with Timesheet hours. If you normally use Timesheets to process payroll, do not use them for this process. Instead, choose the Bonus/Commission pay frequency from the Process Payroll so that you can manually enter the hours/dollars directly into the paycheque.

Example

In addition to her ordinary pay, Mary Jones has been overpaid by 40 hours holiday pay.

The amounts that need to be adjusted are:

Holiday Pay to be reduced by $660

PAYG Withholding withheld to be reduced by $117

Holiday Leave Accrual to be reduced 1.67 hours

Sick Leave Accrual to be reduced by 0.67 hours

Superannuation Guarantee contribution to be reduced by $59.40

Creating a negative paycheque

To create a negative paycheque, you'll first enter a positive value paycheque for the negative amount, then reverse the paycheque and finally delete the paycheque.

When entering the paycheque, enter the amounts as if you were actually paying the employee. You will need to take into account how much extra tax and employee deductions have been deducted in error, as well as any superannuation and leave that have been accrued in error.

Change your Security preferences to deselect (turn off) the option Transactions CAN'T be Changed. They Must be Reversed. See Step 2 for more information.

Go to the Accounts command centre and click Transaction Journal.

Click the Disbursements tab.

Click the zoom arrow next to the paycheque created in Step 1. Ensure you have the correct paycheque displayed.

Go to the Edit menu and choose Delete Transaction.

The result of following the above steps will be:

The amount that was repaid will be credited to the bank account from which you pay your paycheques. Note that if you use electronic payments, the deposit transaction won't occur until you process the negative transaction via Prepare Electronic Payments.

The employee's payroll history and general ledger account balances will be corrected.